Q1 2013 Money Report: Stocks, Lending, Bit Coins, and Personal Business

The first quarter of the year is already over and I am amazed and frightened at how fast time goes. For this first quarter, it has been a wild ride in my life as I’ve put in practices and habits in regards to my money and own business that I’ve never done before. Let me share with you the progress and allocations I have in stocks, lending, bit coins, and my personal business.

Dividend Paying Stocks

To start the year, I allocated roughly 15% of my total cash into Dividend paying stocks. The idea here is to buy shares of stock that pay me back for owning them – I want to get something for my money instead of it just sitting there. I own stocks in Energy, Fast Food, and Mortgage companies at the moment. The dividends range from 3% to 15% on my stocks with a goal of earning 7% every year.

So far, I’m on track to do this and none of the stocks have gone to 0 – my goal is to never have a stock I own go to 0 or have to sell before the dividend potentially drys up or goes down too low. As long as the stocks stay close to even or more in share value, I should be fine. I continue to add 10% of my overall income into my stock account every month.

Current Sentiment: Happy with performance

Crowd Lending

I setup another 15% of my cash on Prosper.com this year as well. Prosper is simply a website portal that helps you crowd fund money to people who need loans for anything ranging from debt consolidation to home repairs to even wedding rings. The loans are given letter ratings starting at A and the further down, the riskier the loan (based on credit rating of the person receiving the loan). I really like that I can allocate as little as $25 to help with a loan to spread out my risk.

So far, I’m earning just over 11% and I only have one loan so far that is late (just over 30 days). I imagine as time goes on, there will be more people who don’t pay on their loans, but as long as that percentage is small and I diversify over a large number of loans that I help fund, I feel things should be OK. If defaulting on loans becomes a problem, I can just scrutinize the loans more and not automate the process as much. I continue to add 10% of my overall income each month into lending.

Current Sentiment: Happy with performance

Bit Coins

I’ve been following the price of bit coins since I just found out they even existed this year. Shame on me for not knowing sooner, but better late than never. Bit coins are simply a virtual currency, not regulated or backed by an official government. Because so much is moving to digital payments, the bit coin really makes a lot of sense. Add to that the frustration people have over regulated currencies, and I believe bit coins are an attractive investment.

However, I feel they have spiked way too high for my risk tolerance. Just look at this chart and see how far they’ve gone up. During September of last year, they were trading for a few dollars. Now they are over 100 dollars. This smells of a bubble, but I could be wrong and they could continue to skyrocket up.

The nice thing about bit coins is that there are only a set amount distributed extra over a set period of time. This means it is not like the government printing more money than it should. Instead, you get a predictable and steady supply added to over time. Could these become the currency of the future? Maybe. I’m keeping an eye out on them and may initiate a buy if the price comes down due to a bubble.

Current Sentiment: Intrigued and may buy some in the future if a bubble bursts

Personal Business

On January 1st of this year, I set out to work every day on a project to create a business with. I chose to make a computer game called “Tower of Eglathia.” Computer games are in my blood and I remember as a middle school child many years ago waking up at 5:00 AM to play “The Bard’s Tale 2” a fantasy-based role playing game. Imagine a middle school aged child getting up at 5:00 AM for anything and you can see why this is in my blood.

It’s nearly been 100 days this year and I’ve held true to my work ethic and have made incredible progress on the game (with help from others like my twin brother). I’m still very much a noob when it comes to programming games, but I’m learning a great deal every day. I update this Facebook page regularly as I make progress on the game and it is fun to see how far I’ve come with it. I continue to work daily on my game business.

Current Sentiment: Happy with progress and the challenge. Not sure if it will make any money but that is OK, I am having fun with it.

Final Thoughts

I look back, particularly at bit coins and realize that I had a change of mindset this year in regards to money. That mindset has allowed me to take advantage of some great opportunities. It has, however, come a little late in regards to the bit coins. If I had this mindset a year ago, I might have seen the bit coin opportunity and snatched up a bunch at a low price and been able to sell them now.

I also feel like things are going well for all my investments. The stocks do fluctuate, so I’ve had to exercise emotional stability to not panic as they do so. I feel I have good investments and I watch them every day. I’m an amateur when it comes to all this, but feel I am learning as I simply spend time studying and making financial and business investments.

Overall, I feel this mindset is making me a better husband and father to my children as well. As I pay more attention and study what I can do best in that area. I’m finding with my studious involvement in investing, it is translating that habit to other areas of my life. I think it’s worth swinging the bat in investing and your own business, even if it does not work out. You learn so much and I feel happier doing it. This ends this quarters money report.

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